BP has agreed to sell ownership of the Marlin, Dorado, King and Horn Mountain fields in the Gulf of Mexico to Plains Exploration & Production Co. (NYSE: PXP) for $5.5 billion. The deal also includes minority stakes in fields held by ExxonMobil (NYSE: XOM) and Royal Dutch Shell (NYSE: RDS.A).

This is big news for PXP, which has a market cap of just $4.7 billion – less than the value of the deal. And in addition to the $5.5 billion going to BP, the company has agreed to buy the remaining interest in the Holstein Field from Shell for $560 million.

PXP will take on $7 billion of debt to finance these acquisitions. But those costs will be mitigated by the cash flow generated from oil production. PXP will also sell off some of its natural gas assets to put a greater emphasis on oil, which is far more profitable. The company aims to boost oil volumes to 89% of its total production next year, up from about 61% now.

All told, PXP expects to see up to $5 billion in cumulative excess cash flow between 2013 and 2016.

BP comes out ahead, as well. Most analysts anticipated a return of $2.2 billion to $3.5 billion for the recent deal, not $5.5 billion.

Better still, the company’s been able to offload aging and less-productive holdings for a solid return and can now focus on its most promising wells. And it still has control of major Gulf of Mexico oilfields, like Thunder Horse, Atlantis, Mad Dog and Na Kika, which are far more lucrative.

Over all, BP has now raised more than $32 billion through asset sales. So it’s just a deal or two short of its goal of $38 billion mentioned above, which could be achieved in the near future…

Just last month, BP agreed to sell off its refinery in Carson, California to Tesoro (NYSE: TSO) for about $2.5 billion. And in July, the company entered a 90-day period to talk to potential suitors for its 50% stake in TNK-BP (PINK: TNKBF) – a joint venture BP formed nearly a decade ago with a group of Russian billionaires.

Rosneft (PINK: RNFTF) has already said it’s interested – whether it goes in alone or takes a partner, like Exxon, along. BP’s oligarch partners may also seek to expand their stake.

Selling its stake in TNK-BP would be game changing for BP.

It’s a big part of BP’s operations. In fact, it accounts for 40% of the company’s global oil output and 27% of its total oil and gas production. And it’s paid BP $19 billion in dividends since 2003.

Still, the project has been fraught with political complications, and it could fetch as much as $30 billion in a sale.

That would bring in enough cash to buy BP a fresh start – like expanding its stake in Canada’s oil sands.

BP’s been a fixture in Canada’s oil sands since 2007, and the president of BP’s Canadian operations has said the company’s looking to develop more projects. Specifically, BP is interested in the Fort McMurray region, which is the epicenter of Canada’s oil sands.

The cash boost could also help the company fight some legal battles. BP’s been working to reach a settlement with the U.S. Justice Department to cover all civil and criminal liabilities relating to the Gulf spill.

BP is reportedly looking to settle for about $15 billion. But the government has a substantially higher figure – about $25 billion – in mind. And judging by an August 31 memo, the government’s prepared to go to court to make up the difference.

The memo, filed with the New Orleans Federal District Court, didn’t hold back one bit – accusing the company of gross negligence and “a culture of corporate recklessness.”

“The behavior, words and actions of these BP executives would not be tolerated in a middling size company manufacturing dry goods for sale in a suburban mall,” it read.

Legal experts say that kind of language suggests the government isn’t close to settling and is very confident it can win in court.

That’s easy to believe, considering oil, tar and other debris continue to wash up along the Gulf shore – driven there by Hurricane Isaac – coating pelicans and shutting down beaches.

A trial is scheduled to begin in January in New Orleans.

It’s in BP’s best interest to settle before then. And if it’s able to do so and further fortify its position with more divestitures, the company will have weathered the storm.

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